Starting a business can be an exhilarating venture but more often than not the road to success is paved with trials that make one stop and think, “Wow, I wish I knew that before I got started.”
Having helped grow a small craft beer company that started out as a home brewing hobby by two firefighters into a successful, multi-million dollar brand, I have learned many valuable lessons about launching a business from scratch.
To help you navigate the bumpy road of entrepreneurship, I’d like to share eight insights from my experience along the journey.
Everyone has heard of the old phrase “Ready, Aim, Fire!” but too many entrepreneurs never move from aiming to firing. Some things you’ll just have to figure out as you go along, but the key thing is to keep moving forward. If you wait until everything is perfect before getting started, you’ll spin your tires in the mud while someone else passes you by. You can fix mistakes; you can’t go back in time and start earlier.
Here’s a general rule for projecting costs, revenues, and the quest to break even: it will take twice as much time and twice as much money as the eternally optimistic entrepreneur thinks it should. It’s okay to be aggressive and think positively; you wouldn’t be an entrepreneur if you didn’t have that mindset. However, it is important to plan for success even if you’re not firing on all cylinders right out of the gate. There’s no harm in under-promising and over-delivering.
We’ve all heard the stories about companies that received an eight-figure venture capital investment based off a sketch on the back of a cocktail napkin. The truth is that the stories of entrepreneurs sleeping on friends’ couches and subsisting on Top Ramen are far more common. Most have to scratch and claw for every dollar they raise. Don’t be discouraged if you can’t find the fabled VC unicorn right away; persistence will pay off in the long run.
Every angel investment group I have ever pitched has been littered with service providers. Yes, some of them may actually be accredited investors, but they aren’t there to make an investment in your company; they are there to drum up business for themselves. I can assure you that you don’t need a global law or CPA firm with hundreds of employees, a wealth manager, or $10 million in life insurance coverage as a single, twenty-something entrepreneur who still hasn’t raised their seed capital. Your time is precious; use it wisely meeting with the right people.
When I look at some of the key deals that kept us in business early on, they didn’t happen because of how great our product is or the dazzling sales pitch we made (even though my ego would like to think so). The deals came to fruition because of key introductions by respected colleagues. Decision makers will take a chance on a referral from someone they know more so than a cold call from off the street. I’ve attended hundreds of networking events, mixers, and conferences and have built a network of thousands of people. This doesn’t mean I’m special; it means I’ve put myself out there and told my story to anybody that would listen. Make it a point to go to events and meet new people regularly and you’ll be amazed at how many doors begin to open.
The most successful people aren’t always the smartest; rather it’s the people that hire the smartest people around them that end up hitting it big. Do anything you can to attract the best employees possible, even if you have to give up equity. Your company will be better for it and your employees will make you look good in the process.
Of all the tips on this list, this is by far the hardest to execute. You will have bad days and some really bad days. The good news is that those days are rarely as bad as you think they are and they always pass. The sooner you can move on, the sooner you can get back to being productive and moving forward. The same goes for great days; celebrate the individual victories as they come, but realize there’s more work ahead to get to the next step in your growth.
Being an entrepreneur is an incredibly rewarding experience. Not many people have what it takes to build something from the ground up, so cherish the opportunity that you’ve earned. It’s easy to get caught in your own bubble and not realize how far you’ve come. No matter where your company is at in its growth cycle, take some time to look back on where you were at certain points in the past. Realizing the progress you have made will motivate you for more.
—David Johnson is the COO & CFO of Fireman’s Brew, Inc. and a graduate of the USC Marshall School of Business Lloyd Greif Center for Entrepreneurial Studies.